Affordable Care Act
Four Ways Obamacare Affects Health Insurance for Small Business
Published on June 03, 2014
Started a new business recently? You’re not alone. There are over 23 million small businesses in the US1, and yours may be the newest addition. Whether you’ve just gotten your idea and your business plan dialed-in, or you’ve been humming along for years, there’s one big question small business owners face every year: What am I going to do about health insurance for my employees? When we talk to our customers, we hear the same questions all the time: “Should I continue to offer coverage for employees? Where will I get the best deal on coverage? How will the Affordable Care Act (ACA, or Obamacare) affect the health insurance I offer? “ Here’s the latest on what you need to know regarding Obamacare for small businesses:
- Legal requirements of Obamacare – Under the Affordable Care Act, businesses with fewer than 50 full-time equivalent employees that do not provide health insurance to their employees won’t face tax penalties (a.k.a. the employer shared responsibility payment) for not doing so.
The good news for all small business owners is that the tax penalty on employers with more than 50 employees (or full-time equivalent employees) who don’t offer coverage (or whose coverage doesn’t meet certain minimum standards) was postponed, so you won’t have to deal with it in 2014.
- Getting the “best deal” on small business health insurance – The fact is that health insurance prices are fixed, by law. You can’t get a better price or some sort of discount on a plan based on whom you buy it from.
Since you can’t get a discount on prices anywhere, your best bet is to look at as many options available, which is what makes eHealth such a great option. The ACA also created something called the Small Business Health Options Program (SHOP) marketplace to help businesses provide health coverage to their employees.
- SHOP Plans – In some states, like California, eHealth can help you enroll in SHOP plans as well as compare SHOP plans to other plans available outside SHOP. SHOP plans are only an option for small businesses with 50 or fewer full-time employees, and could provide some tax breaks to employers with less than 25 full-time equivalent employees, if they qualify.
To qualify for a SHOP tax credit worth up to 50% of your contribution toward employee premiums, you must pay at least 50% of your full-time equivalent employees’ premiums. And, to get the full discount, your average employee’s salary has to be $50,000 per year or less. Discounts phase out completely once the average employee salary crosses $50,000 a year.
- Plans not available through SHOP – Whether you qualify for a SHOP tax break or not, it’s a good idea to compare SHOP plans to other plans available in your area because they may offer several advantages for your business.
In many areas you’ll find a large selection of plans that are not available through the SHOP program from more insurers. These traditional small group health insurance plans also often have a little more variety and flexibility when it comes to things like co-payments and doctor networks. Shopping is hard – At eHealth, we try to make Obamacare easy. If you work with a licensed eHealthInsurance agent, we can help you choose from a very large selection of plans by listening to your needs and quickly filtering your options into something that fits your business. As always, you’ll have a dedicated team here at eHealth that supports your business with enrollments, cancellation of employees, and claims and billing assistance. We can also help you and your employees get a complete benefits package that includes things like dental, vision, life, and long-term and short-term disability options. Bottom line – Health insurance is complex, and many people don’t know how to go about finding the best coverage for their needs. Now more than ever, it pays to be a smart shopper. Knowing your options can help you save money and find the right plan for you and your employees. To learn more about your different insurance options, contact one of our many helpful licensed agents at eHealth.com.
1Small Business Trends (Source)